The Case Against the Fed is a book by Murray N. Rothbard criticizing the United State Federal Reserve, fractional reserve banking, and central banks in general. It details the history of fractional reserve banking and the influence that bankers have had on monetary policy over the last few centuries.

Rothbard claims that the notion that the Federal Reserve is designed to fight inflation is merely propaganda. He explains that since money supply inflation is only caused by an increase in the money supply, and only banks increase the money supply, then banks, including the Federal Reserve are the only source of money supply inflation. (Wikipedia.org)

The most powerful case against the American central bank ever written. This work begins with a mini-treatment of money and banking theory, and then plunges right in with the real history of the Federal Reserve System. Rothbard covers the struggle between competing elites and how they converged with the Fed.

Rothbard calls for the abolition of the central bank and a restoration of the gold standard. His popular treatment incorporates the best and most up-to-date scholarship on the Fed's origins and effects. (Amazon.com)

The Austrian School

The Austrian School of economics was founded with the publication of Carl Menger's 1871 book Principles of Economics. Members of this school approach economics as an a priori system like logic or mathematics, rather than as an empirical science like geology. It attempts to discover axioms of human action (called "praxeology" in the Austrian tradition) and make deductions therefrom. Some of these praxeological axioms are:

        * Humans act purposefully.
        * Humans prefer more of a good to less.
        * Humans prefer to receive a good sooner rather than later.
        * Each party to a trade benefits ex ante.

Even in the early days, Austrian economics was used as a theoretical weapon against socialism and statist socialist policy. Eugen von Böhm-Bawerk, a colleague of Menger, wrote one of the first critiques of socialism ever written in his treatise The Exploitation Theory of Socialism-Communism. Later, Friedrich Hayek wrote The Road to Serfdom, asserting that a command economy destroys the information function of prices, and that authority over the economy leads to totalitarianism. Another very influential Austrian economist was Ludwig von Mises, author of the praxeological work Human Action.

Murray Rothbard, a student of Mises, attempted to meld Austrian economics with classical liberalism and individualist anarchism, and is credited with coining the term "anarcho-capitalism". He was probably the first to use "libertarian" in its current (U.S.) pro-capitalist sense. He was a trained economist, but also knowledgeable in history and political philosophy. When young, he considered himself part of the Old Right, an anti-statist and anti-interventionist branch of the U.S. Republican party. When interventionist cold warriors of the National Review, such as William Buckley, gained influence in the Republican party in the 1950s, Rothbard quit that group and formed an alliance with left-wing antiwar groups.

Later, Rothbard was an early supporter of the U.S. Libertarian Party, despite initially opposing it on grounds that it was premature. In the late 1950s, Rothbard was briefly involved with Ayn Rand's Objectivism, but later had a falling out. Rothbard's books, such as Man, Economy, and State, Power and Market, The Ethics of Liberty, and For a New Liberty, are considered by some to be classics of natural law libertarian thought.

Rothbard divides the various kinds of state intervention in three categories:

   1. autistic intervention, which is interference with private non-exchange activities
   2. binary intervention, which is forced exchange between individuals and the state
   3. triangular intervention, which is state-mandated exchange between individuals.

According to Sanford Ikeda, Rothbard's typology "eliminates the gaps and inconsistencies that appear in Mises's original formulation."

Rothbard argued that the entire Austrian economic theory is the working out of the logical implications of the fact that humans engage in purposeful action.

Download The Case Against the Fed by Murray N. Rothbard

PDF format, 9.88MB, 162Pages. Provided by Mises.org.

The contents of this volume include:

    * Introduction: Money and Politics
    * The Genesis of Money
    * What is the Optimum Quantity of Money?
    * Monetary Inflation and Counterfeiting
    * Legalized Counterfeiting
    * Loan Banking
    * Deposit Banking
    * Problems for the Fractional-Reserve Banker: The Criminal Law
    * Problems for the Fractional-Reserve Banker: Insolvency
    * Booms and Busts
    * Types of Warehouse Receipts
    * Enter the Central Bank
    * Easing the Limits on Bank Credit Expansion
    * The Central Bank Buys Assets
    * Origins of the Federal Reserve: The Advent of the National Banking System
    * Origins of the Federal Reserve: Wall Steet Discontent
    * Putting Cartelization Across: The Progressive Line
    * Putting a Central Bank Across: Manipulating a Movement, 1897-1902
    * The Central Bank Movement Revives, 1906-1910
    * Culmination at Jekyll Island
    * The Fed at Last: Morgan-Controlled Inflation
    * The New Deal and the Displacement of the Morgans
    * Deposit "Insurance"
    * How the Fed Rules and Inflates
    * What Can Be Done?

ISBN 0-945466-17-X 158 pp.

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